The $80 billion worth decentralized finance (DeFi) market is soar by 10 times according to Matthew Roszak who is a billionaire venture capitalist and a veteran crypto investor. The best decentralized finance exchange platforms had a substantial contribution in fueling the exponential growth of the DeFi market.
If you are on a crypto entrepreneur planning to launch into the market with a perfect decentralized exchange, this blog would help you figure out 5 critical components that make an excellent decentralized exchange.
Exchange engines must be robust enough to deliver the best trading experience to the traders. These are some of the characteristics of an ideal exchange core to consider while sharing requirements with the best DeFi exchange development company:
– High Liquidity:
Liquidity is however the most critical requirement of an ideal trading engine. High liquidity would help exchanges fulfill buy and sell orders at lightening fast speed at the best price possible. It also enables less-slippage (i.e. the difference between ideal and executed trade price) and enhances the trading experience.
– Ability to work impeccably under high loads
The crashes caused by the high loads of pressures over the trading engines slowly chips away the credibility of the exchanges.
– Unbreakable Security
Since the industry is doomed with examples of audacious breaches and hack attacks, the venture capitalists must take necessary measures to maximize security. Ideal measures include leveraging cold storage to store majority of customer funds, keeping eye on insider threats, having a flexible standard plan to deal with breaches and increasing customer awareness.
Failure to include any of the abovementioned characteristics in DeFi exchange development can deteriorate the user experience, hamper the user-retention rate and also sabotage the reputation of the exchange platforms.
As the crypto acceptance mushrooms rapidly, experts predict amplified regulatory guidance around the digital currencies. Besides, customers are more likely to confide in the trading platforms that abide by the regulations and compliances. Here’re some of the consequences that failing to achieve compliance might bear for crypto exchange ventures:
– Huge Fines, Lawsuits or Frozen Assets
The legal risks around incompliance can be financial, time-consuming and even can lead to shut-down of the crypto ventures. Despite the disruptions that they bring for the business owners, it also leads to customers losing their confidence in the particular exchanges.
– Reputational Damage
Any hacking incident caused can take a heavy toll on the reputation of the exchanges. It can cost them loss of a huge customer base.
– Business disruptions resulting from ceases/desists
There are thousands of cases over the reputed and startup crypto ventures where ceases and desists are announced by the regulatory bodies. This involves financial and reputational loss of capitalists and investors whose funds are left trapped in the projects.
Businesses, launching crypto exchanges nowadays might not realize the importance of regulatory compliance but in the future, it is going to be the most significant prerequisite for crypto trading platforms. For the players with international ambitions, it is always ideal to actively engage with regulators and hire the experienced development companies for DeFi exchange development. They can guide the businesses on how they can deal with various strict and lax legal requirements.
During the time of crashes, breaches or hack attacks, customers need to hear from the faces behind the exchanges that the issues are being worked on. This increases the chances of customers forgiving the platforms for the inconvenience caused. Since community drives the crypto ventures, businesses need to be transparent and honest with the communities. This is where PR and marketing agencies play their role. Here’re some of the PR and marketing strategies that businesses must consider for assured success:
– Cater to the diversified customer needs:
A vision to target a huge customer base across the world exposes the crypto ventures to a wide variety of customer needs. Novices, experienced day traders, long term hodlers, institutional investors or any other kind have their own requirements which the exchange and their marketing must reflect.
– Diversify your marketing channels
Make sure you are leveraging a right blend of online and offline channels to market your brand. For best results, businesses must involve everything ranging from social media, Google ads to merchandise and physical giveaways in marketing.
– Target the hubs
To attain a globalized, substantial growth, new exchanges must focus on expanding their communities in different crypto-friendly countries. India, Ukraine, Russia, Indonesia, Turkey and other developing countries in Latin America & Asia are some of the key crypto trading hubs where the entrants can find their customers.
By leveraging effective PR and marketing strategies, businesses can experience a fast-paced growth. When customers are educated adequately and kept engaged, a strong reputation builds up in their mind for that particular brand. It won’t only make them a loyal customer but would also help in the acquisition of new customers.
In order to execute exemplary DeFi exchange development, entrepreneurs planning to build incredible crypto trading platforms must figure out the ideal solution for the clearance and settlement layer. A technology like blockchain is one of the most befitting solutions ensuring that there is no counterparty risk. Here’re some of the advantages of leveraging the incredible blockchain technology at the clearance and settlement layer:
– Reduction of Overall Costs
Blockchain slashes the transactional costs involved through the application of smart contracts. Smart contracts enable transactions to be carried out without any third party involvement which cause substantial decrease in transaction fees.
– Elimination of Intermediaries:
Blockchain makes it possible to transact without involving intermediaries. At the core of decentralized approach of blockchain, stand smart contracts that can enable faultless, accurate, immutable and secure transactions.
– Quicker Transactions
Blockchain relieves the decentralized finance exchange platforms from the convoluted, lengthy backend processes. So, it doesn’t take days to complete a transaction but seconds or minutes. Unlike the traditional transaction infrastructures (for e.g. banks), the technology enables rapid transactions 24*7.
A reliable technology provider can ensure that you attain all the above mentioned benefits by building a faultless decentralized finance exchange. A blockchain development company that doesn’t have a robust track record can effectively damage your reputation.
Even the best DeFi exchanges fail in the eyes of customers when there are inaccessible help and support sections, customer support phone lines where executives take forever to answer calls and emails that aren’t answered for days. All of this looks like a very bad customer service which is not acceptable by customers who have a huge choice of decentralized finance exchanges in front of them.
– 24*7 Multi-Channel Support:
It is ideal for crypto exchanges to offer support when and where their customers need. They should be able to connect with the advisors via email, phone or live chat at any time of the day. A prompt reply on whatsoever channel they use would add a lot to decentralized exchange’s reputation.
– Multi-Language Support:
Those entrepreneurs looking for internationally focused DeFi exchange development must cater to the users across the world by offering a multi-language support. Multilingual support offers crypto exchanges a major competitive advantage.
– Easily Accessible User Guides:
A trading platform that welcomes the first-time crypto buyers must offer user-friendly guides that walk the users through each and every process smoothly. An effectively educating user-guide would also result in fewer mistakes made by the users over the trading platforms, reducing the number of queries.
Crypto Exchanges must also take care that they offer a convenient user interface and optimized mobile applications. A website that seems easy to use would also help the crypto exchanges leave a mark on the customers’ mind.
Above mentioned 5 components make the recipe for success. So, if you are a crypto entrepreneur that wishes to get an ideal DeFi exchange platform built, consider these critical components and choose the best and the most reliable DeFi exchange Development.